No Time for Complacency
Washington, D.C. has long had a tendency to avoid decisive action until crises make continued delays untenable. This being the case, there should be a great sense of joy and relief in the Nation’s Capitol over the Medicare Trustees pushing the projected date of Medicare insolvency two more years into the future, to 2026.
That would, of course, be the wrong way to look at this issue.
Whether it’s 2024 or 2026, the fact remains that Medicare insolvency is still where it shouldn’t be, on the foreseeable horizon. And with the number of retirees rapidly climbing and utilizing, on average, three dollars of healthcare services for every one dollar they paid in payroll taxes during their working years, the Medicare status quo is no more sustainable today than it was before the Trustees Report was issued.
(A side note here: Yes, there are those who will insist that insolvency is not really all that catastrophic, that there will still be sufficient revenues to pay 85 or 90 percent of benefit obligations and, anyway, Congress would never allow Medicare to fail in meeting beneficiary needs. I have no doubt this is true, but assurances like these gloss over the actions that would be necessary in order to make up for this financial shortfall – higher taxes, greater burdens on beneficiaries, further cuts in payments for Medicare services, or some combination of all of the above.)
Treasury Secretary Jack Lew was correct in saying today that we need to act sooner rather than later to address Medicare’s financial challenges. The longer we wait, the more draconian the remedies in trying to forestall insolvency.
And it remains true that solutions are right in front of us. The Medicare Part D program continues to be incredibly successful in keeping federal costs well below projections and in keeping medications highly affordable for seniors. Medicare Advantage plans are achieving health outcomes superior to the conventional Medicare fee-for-service program. What these two programs have in common are a reliance on consumer choice and competition to drive value, the same components that are central to the Affordable Care Act’s health insurance exchanges.
As we discuss Medicare’s future, it only makes sense to examine how the lessons learned from these already-existing success stories can be utilized to ensure healthcare security for future generations.
So, as we examine the 2013 Medicare Trustees Report, let’s focus not on the fact that insolvency is delayed by two years, but at the fact we’re still talking about insolvency at all. Then, let’s begin the discussion on how to remove that prospect from the imminent horizon.
